What is a Money Order?

When you need a secure way to make a payment that’s as good as cash, a money order could be the solution you’re looking for. It acts similarly to a check but you don’t need a bank account in order to get one. On top of that, money orders are generally accepted even in situations where a personal check is not. 

Learn more about how money orders work and how you can get one to see if this alternative payment method could help you.

How Money Orders Work

A money order is a paper transaction that has already been paid for with funds, giving the recipient extra peace of mind that it can be cashed with no issues. Unlike a personal check, a money order does not draw on your bank account

Instead, it represents true monetary value because the issuing institution has vouched that the money is available. In other words, a money order won’t bounce. Money orders are prepaid but usually have a maximum on each one (most places cap the amount at $1,000). 

Where to Buy a Money Order

You have several options available when it comes to buying a money order. First, you can use a bank or credit union, even if you don’t currently bank there. You can also go to a U.S. post office, a money transfer location (such as Western Union or MoneyGram), or Walmart. There’s no need for an appointment; as long as the location is open, you can just walk right up to the counter and get started on buying your money order.

The price of the money order varies on the purchasing location. They’ll either charge a flat fee or have a tiered cost structure based on the amount of the money order. On the lower end, expect to pay around $0.88 at Walmart, though the exact cost can vary by location.

A money order purchased at the post office costs $1.25 if the value is $500 or less, otherwise, it costs $1.70 (up to a $1,000 limit). At military facilities, you can send a military money order for just $0.45.

You may save a little bit by going to a money transfer company like Western Union. The cost depends on where you are, but most locations charge around $1 to get a money order.

Common Uses for Money Orders

Money orders aren’t necessary for everyday use, but there are quite a few situations in which they can come in handy. These are three of the most common reasons for choosing to use a money order over any other form of payment.

Standing in for a Check

If you don’t have a bank account, you can still pay for major purchases or services that require a check without worrying about whether or not you’ll get approved. On top of that, you may prefer carrying a money order in your wallet rather than cash because it can be canceled. If your money is stolen, there’s very little you can do to get it back. 

Plus, even if you have a valid checkbook, some retailers or service providers may not accept personal checks because there’s a risk they’ll bounce. A money order is usually an acceptable alternative if using a personal check isn’t an option. 

Avoiding Cash in the Mail

When you want to send cash in a safe and secure way, a money order can be an ideal replacement. It’s easy to have cash stolen in the mail, either en route or once it’s arrived in the recipient’s mailbox. It’s much safer to send a money order, which also doesn’t have anyone’s sensitive financial information on it. If your recipient doesn’t have a bank account, it’s also easy for them to cash once they receive it. 

Protecting Your Privacy

Sending a money order ensures your bank account number doesn’t fall in the wrong hands. It may be tricky for a scammer to cash a stolen check, but they could still gain access to your money by using your account and routing numbers. Whether you’re mailing funds or need to pay a stranger (such as during a Craigslist transaction), a money order is a secure and relatively anonymous way to do so. 

How to Use a Money Order: Step by Step

When you’re ready to purchase a money order, follow these two simple steps in order to complete your transaction. 

1. Pay for you Money Order at a Convenient Location

Pick one of the above locations to buy your money order. You may choose based on cost alone, or you may prefer to go by convenience. You’ll need to pay for both the amount you want on the money order as well as the fee. 

Payment options include cash or debit card. You can’t use a credit card for money order, but if you’re in a tight spot, you could use a cash advance from your credit card. This, however, comes with high fees and a more expensive interest rate than your usual APR. Once you pay, hang onto your receipt to keep track of the money order before the recipient has a chance to cash it.

2. Bring the Required Information to Fill Out the Money Order

A money order doesn’t require a ton of information in order to fill it out, but you will need a few key pieces of information. Of course, you’ll need to pick an exact amount that the money order will be worth. Make sure you know the specific number.

You’ll also need to provide the recipient’s name and address. The money order will be written out directly to that person or company so be prepared. While the address doesn’t go on the money order itself, some issuers might require the information. Bring it with you just in case you need it.

After that information has been entered, you simply need to pay and sign the front of the money order. If you’ve ever written out a check before, the process is very similar. 

From there, all you have to do is send or hand over the money order to the recipient. The process is quick and easy as long as you have the funds and the name of the recipient. 

Cashing a Received Money Order

When you’re on the receiving end of the money order, you need to know how to cash it in order to get the money in your pocket. Money orders can be cashed at most of the locations at which you can purchase one. Remember, these include places like the post office, a money transfer company, a bank or credit union, or even a grocery store that offers this service. Depending on the location, you may only be able to cash the money order if it was issued by the same company. For example, to cash one at Walmart, the money order must have been created at a Walmart.

Sign the back of the money order and bring a government-issued ID when you get to the counter. The company will charge a fee that’s deducted from your funds before you get the cash. From there, you’re free to go with the money safely in your back pocket. 


The hallmark benefit of a money order is that it’s pretty safe to use. There are a number of security features on a money order that make it extremely difficult to copy. It’s a very trusted form of payment since counterfeits are rare. 

Another benefit is that they’re fairly easy to cancel if you lose the money order. As long as you have your receipt, you can go back to the issuer to get it canceled. You’ll have to pay a fee for this service, but it’s cheaper than losing the cash that was attached to the money order.

There’s also personal safety that comes with a money order because aside from your name and signature, there’s no other identifying information on there. If you’re paying someone you don’t know very well, it’s a risk-free way to do so without giving out your address or bank account information. 

The Bottom Line

While money orders have been used in the U.S. since the 1800s, they remain an extremely relevant and convenient form of payment today. Add to that high-tech anti-fraud measures available to anyone who can show up with cash, and it’s no surprise that money orders have lasted so long.

It doesn’t matter if you have a checking account or not, you can access those benefits (plus some extra security) simply by using a money order. Plus, it’s a fast process that costs very little if you only use them every so often.